July 17, 2012 Newsletter

Dear Friends,

Tangents:

I read an article last night in the most recent edition of Maclean’s which will be troubling for us all, especially vegetarians.  It is entitled The Secret Life of Plants – Even if they can’t hear a word you say, a botanist says they can see, smell and feel.

Plant biologist Daniel Chamovitz says that, for instance, “a willow tree can ‘smell’ when another willow is being attacked by tent  caterpillars.  The infested tree produces salicylic acid, a chemical found in aspirin, which makes its leaves taste bitter and unpalatable.  At the same time, the chemical is released into the air, and that chemical message, received by healthy willows, triggers the same defence.  According to Chamovitz, the infested willow is signaling, ‘I’m sick! Beware! Defend yourselves!’….Plants can ‘see,’ too.  They monitor their environment all the time.  They know if you’re standing over them.  They know if you’re wearing a blue or red shirt.  ‘Plants see the same ultraviolet light that gives us sunburns and infrared light that heats us up.  they can tell when there’s very little light, like from a candle, or when it’s the middle of the day, or when the sun is about to set into the horizon.’….While hearing warns humans of speeding cars and other dangerous situations, plants can’t flee, so there’s no evolutionary reason for them to hear….Plants do ‘feel’ however.  A 1966 Colorado State University showed the cocklebur weed can die ‘simply by touching it for a few seconds each day,’ according to author Frank Salisbury.  .  this touch-based growth inhibition’ is an accepted phenomenon in plant biology…”  -Julia McKinnell

And on this day in…

1918 – Czar Nicholas II and family are executed.

1934 – Donald Sutherland, actor, is born.

1955 – Disneyland opens.
1967 – Jimi Hendrix drops out as opening act for The Monkees.
1975 – Superpowers meet in space.
1987 – Lt. Col. Oliver North and Rear-Admiral John Poindexter begin testifying to Congress regarding the Iran-Contra Affair.

We all live with the objective of being happy; our lives are all different and yet the same. – Ann Frank

photos of the day July 17, 2012

Dancers from the Bangarra Dance Theater perform a scene from their show ‘terrain’ at the Sydney Opera House in Sydney.

Rick Rycroft/AP

A man poses for a photograph near a 3D painting at the 2012 Magic Art Special Exhibition in Hangzhou, Zhejiang province, China, on Monday.

Stringer/Reuters

Market Closes for July 17, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

July 17 (Bloomberg) — Canadian stocks gained for a third day as rising oil prices drove energy shares higher and expectations grew that the U.S. Federal Reserve will take further action to boost growth.

Imperial Oil Ltd. and Canadian Natural Resources Ltd., two of the nation’s largest energy providers, added at least 1.4 percent. Heroux-Devtek Inc. surged 33 percent after the maker of landing gear agreed to sell four factories to Precision Castparts Corp. for C$300 million. Energy stocks contributed the most among 10 industries to the advance in the Standard & Poor’s/TSX Composite Index.

The S&P/TSX advanced 50.01 points, or 0.4 percent, to 11,571.19. It lost as much as 0.4 percent in earlier trading.

The gauge is down 3.2 percent in 2012.

Fed Chairman Ben S. Bernanke told senators that the central bank is prepared to act to boost growth if the labor market doesn’t improve. Oil rallied 0.9 percent to a seven-week high after his comments and as a Bloomberg survey of analysts showed inventories of the commodity falling.

“Ben Bernanke understands that to make a deleveraging feel not as bad, you can add a lot more money to the system than you normally could,” Arthur Salzer, who manages C$200 million at Northland Wealth Management, said in a phone interview. “He’s doing everything in his power to keep the patient alive.”

Suncor Energy Inc., the nation’s largest oil producer, climbed 0.9 percent to C$29.99. Imperial Oil rallied 1.4 percent to C$43.13. Canadian Natural Resources gained 3.1 percent to C$27.31.

Pinecrest Energy Inc., a Calgary-based oil and gas explorer, advanced 12 percent to C$1.86 as CIBC analysts upgraded its stock to outperform from perform.

Heroux-Devtek rose 33 percent, its biggest gain since at least 1988, to C$10.42 on its sale announcement.

Gold miners declined as the metal fell for the second day on the Comex. Barrick Gold Corp., the world’s largest producer of the metal, lost 0.9 percent to C$35.08. Goldcorp Inc., the second-largest producer, slumped 0.5 percent to C$34.10.

AuRico Gold Inc. slid 13 percent to C$6.66, the most in nearly 11 months, as the company lowered its 2012 production forecast. Separately, the operator of three mines in Mexico and Canada said Chief Executive Officer Rene Marion will resign for health reasons.

US

By Inyoung Hwang and Julia Leite

July 17 (Bloomberg) — U.S. stocks rose, erasing earlier losses, as Federal Reserve Chairman Ben S. Bernanke told senators the central bank is prepared to act to boost growth if the labor market doesn’t improve.

All 10 groups in the Standard & Poor’s 500 Index rose. Walt Disney Co. rallied 3.1 percent to a record after Bank of America Corp. analysts raised the world’s largest entertainment company to a buy. Coca-Cola Co. advanced 1.6 percent after earnings beat projections. Mattel Inc. jumped 9.7 percent after second-quarter profit exceeded the average analyst estimate.

The S&P 500 added 0.7 percent to 1,363.67 at 4 p.m. in New York after losing as much as 0.6 percent. The Dow Jones Industrial Average increased 78.33 points, 0.6 percent, to 12,805.54. Trading of S&P 500 stocks was 4.6 percent below the average level at this time of day over the past three months.

“The stock market has faith in the Fed,” said Jack Ablin, chief investment officer at BMO Harris Private Bank in Chicago, which oversees about $60 billion of assets. “With all of the headlines, and all of the slowing, investors still believe the Fed will do anything in its power to keep the ship afloat.”

Stocks headed lower in the first hour of trading as Bernanke’s prepared testimony to Congress cited no specific details on the central bank’s plans, disappointing investors anticipating a more aggressive approach to helping the economy.

Equities recovered as Bernanke’s responses to senators boosted confidence that he’s prepared to take action.

The S&P 500 slipped in seven of the previous eight sessions and is down 3.9 percent from a four-year high in April as economic data trailed estimates and investors braced for the first decline in quarterly profits since 2009.

The Fed Chairman’s testimony follows data yesterday showing a contraction in June retail sales and a report today that the cost of living in the U.S. was little changed in June, a sign inflation may stay subdued.

The Citigroup Economic Surprise Index for the U.S., which measures how much data from the past three months is beating or missing the median estimates in Bloomberg surveys, is at minus 62.30, near the almost 11-month low of minus 64.9 reached last week. The gauge peaked at 91.9 in January.

Bernanke told lawmakers that progress in reducing unemployment is likely to be “frustratingly slow” and repeated that the central bank is ready to take further action to boost the recovery, while refraining from pledging any new policies.

“If after earnings season we see companies decide to make wholesale staff reductions because of lower top line sales growth, that could put the job market at risk, and then the Fed would act very promptly,” Alan Gayle, a senior strategist at RidgeWorth Capital Management in Atlanta which oversees about $47 billion, said by phone.

Profits beat estimates at 35 of the 49 companies in the S&P 500 that have reported quarterly results so far, data compiled by Bloomberg showed. Earnings are down 3 percent for the group and analysts forecast profits for the entire S&P 500 to decrease 2.1 percent.

Health-care, raw-material, telephone stocks and energy led gains among the 10 main S&P 500 industries by rising at least 1.1 percent.

Walt Disney rallied 3.1 percent to $49.35, its highest price ever, helping lead consumer discretionary stocks higher.

The company was raised to buy from neutral by Bank of America, which cited a boost to 2012 earnings from the film “Marvel’s The Avengers” and a contribution to profit next year from the opening of Cars Land.

Coca-Cola advanced 1.6 percent to $77.69. The world’s largest soft-drink maker reported second-quarter profit that topped analysts’ estimates, helped by pricing increases in North America late last year.

Mattel jumped 9.7 percent to $34.05 for the biggest gain in the S&P 500. The world’s largest toymaker surged the most in more than three years as price increases helped second-quarter profit and revenue top analyst estimates.

Sprint Nextel Corp., the third-largest U.S. wireless carrier, rose to the highest level since September after Credit Suisse Group AG boosted its price target for the stock, citing its network upgrade and cost management. Sprint advanced 5.5 percent to $3.65.

Mosaic Co. climbed 5.1 percent to $58.21. The fertilizer producer doubled its dividend and posted fourth-quarter earnings and revenue that beat analysts’ estimates after an extended spring season.

State Street Corp. slipped 6.4 percent, the most in the S&P 500, to $41.33. The third-largest custody bank agreed to buy the hedge-fund administration unit of Goldman Sachs Group Inc. to boost growth.

Have a wonderful evening everyone.

Be magnificent!

Man lives in confusion and fear until he discovers the uniformity of the law in nature;

until then the world is a stranger to him.

And yet, the law discovered is only the perception of the harmony between reason,

which is the soul of man, and the play of nature.

It is the bond that unites man to the world he lives in.

When he discovers it, man feels an intense joy, because he realizes himself in his environment.

To understand this is to find something to which we belong,

and it is the discovery of ourselves outside ourselves that gives us joy.

Rabindranath Tagore, 1861-1901

As ever,

Carolann

No one has a finer command of language

than the person who keeps his mouth shut.

-Sam Rayburn, 1882-1961

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7